New on-chain research by VanEck analysts says Bitcoin’s recent decline is being driven by medium-term holders, not long-term holders.
In a recent report, the firm noted that short-term futures markets are showing a significantly oversold situation following tariff-driven liquidations, while long-term holders continue to accumulate.
Despite widespread speculation that early Bitcoin whales triggered the decline, on-chain data shows that coins held for more than five years continue to rise.
These older generations have increased their holdings by approximately 278,000 BTC over the past two years, indicating that the oldest wallets have limited sales.
In contrast, the supply of wallets that last moved coins between 3 and 5 years ago decreases over each measurement period. Over the past two years, this tranche has decreased by 32% as coins were transferred to new addresses.
VanEck analysts view these sellers as cycle-driven traders rather than long-term investors.
“Weak hands” create early pressure: Van Eck
Last month saw a -13% drawdown, due in part to outflows from Bitcoin ETPs. Since October 10th, Bitcoin ETP balances have declined by 49,300 BTC (approximately 2% of total assets under management) as recent buyers exited positions due to interest rate cut uncertainty and changes in AI market sentiment.
Sentiment indicators also indicate rising anxiety among retail participants. Bitcoin’s Fear and Greed Index has fallen to its lowest level since March, coinciding with the onset of tariff-related volatility.
Whale holdings change in a more subtle pattern than a perfect distribution, Van Eck noted. While large holders in the 10,000-100,000 BTC range have reduced supply over the long term, decreasing by 6% in 6 months and 11% in 12 months, medium-sized holders in the 100-1,000 BTC range have absorbed this supply, increasing their balances by 9% and 23% over the same period.
Recently, some large-scale investors have turned into net buyers. The 10,000-100,000 BTC group has increased its holdings over the past 30, 60, and 90 days, consistent with a sharp decline in futures market open interest during tariff liquidations.
Although analysts have stopped short of predicting the direction, the data shows that long-term Bitcoin holders remain largely intact, mid-cycle traders are driving the sell-off, and the futures market is undergoing a major reset.
After a month of apparent liquidations, analysts are characterizing the current situation as consistent with previous periods of tactical re-entry for some investors.
Mid-cycle Bitcoin holders sell the most
When analyzing coins by age rather than wallet size, selling pressure is most concentrated among holders who last moved their Bitcoin within the last six months to five years. These groups have experienced significant exodus over the past month.
Holders of the 6-month to 2-year band are taking turns as sellers and entering the market, while the 3- to 5-year band continues to shrink over all time periods studied. Analysts are linking this behavior to traders who entered during previous down cycles and are now exiting as prices fall.
By comparison, coins that were last moved more than five years ago have minimal volatility, supporting the idea that long-term holders are not driving the decline.
Bitcoin futures market reset due to funding and collapse of open interest
Speculative positions in the futures market were rapidly unwound. Open interest in Bitcoin perpetual futures has fallen about 19% in the 12-hour period during the decline, and has fallen 20% in BTC terms since October.
Funding rates, a key gauge of futures market optimism, also fell to their lowest level since late 2023.
Analysts at VanEck noted that large basis trading operations, including structured products and funds that use long spot/short perp strategies, may be suppressing funding signals.
At the time of writing, Bitcoin is hovering around $88,500 (a seven-month low) as the crypto market continues to retreat, with major crypto stocks plummeting. Bitcoin is down 4% in 24 hours and is trading near the bottom of its weekly range with daily volume of $71 billion and market capitalization of $1.78 trillion.
The post VanEck: Mid-Cycle Traders Driving Bitcoin Selloff while Long-Term Whales Keep Holding first appeared in Bitcoin Magazine and is written by Micah Zimmerman.
